The altcoin market has surged since Donald Trump’s presidential victory, but concerns are mounting over its sustainability. Felix Hartmann, managing partner at Hartmann Capital, cautioned in a December 7 X post that institutional investors may soon take profits, sparking a sharp market correction.
Hartmann pointed to sky-high funding rates, some exceeding 100% annualized, and declining spot trading volumes as warning signs. He suggested that recent altcoin moves have been largely fueled by leveraged perpetual traders. “Once momentum tips, we’ll see some murder wicks,” he said, predicting a volatile downturn for overvalued assets.
Historically, such corrections are not unprecedented. In late 2021, Solana (SOL) peaked at $248.36 but crashed 64% to $89 within two months. XRP suffered a similar fate, losing about 51% in the same period. Hartmann’s cautionary tone echoes these earlier shakeouts, with a warning that a repeat could be on the horizon.
Bullish Traders Say Altcoin Season Is Just Starting
Despite the grim forecast, some traders remain optimistic, arguing that altcoin season has only begun. Crypto analyst MilkyBull Crypto suggested in a December 6 X post that the current altcoin rally could last through March. Sensei, another prominent trader, backed the sentiment, declaring to his 72,900 followers, “Altseason has just started.”
Key altcoins have posted remarkable gains since November 1, with Hedera (HBAR) up 99.31%, IOTA (IOTA) climbing 79.61%, and JasmyCoin (JASMY) surging 72.47%, according to CoinMarketCap. This momentum, coupled with a decline in Bitcoin dominance to 55.11% over the past 30 days, is fueling bullish sentiment among traders who view Bitcoin dominance as a key metric for altcoin cycles.
Outlook Remains Divided
However, rising funding rates for perpetual futures contracts could complicate the bullish case. Bulls are paying 4% to 6% monthly to maintain leveraged positions. While manageable during a strong rally, these costs could erode profits if prices falter, potentially triggering a sell-off.
As altcoin investors weigh the bullish optimism against bearish caution, the market faces an inflection point. Whether this rally represents the early stages of a sustained altcoin season or the prelude to a sharp correction, one thing is clear: volatility will remain the defining feature of the crypto market in the weeks ahead.
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